China’s healthcare service sector surged by 8% in 2016, with a strong performance expected for 2017 as well, mainly thanks to the rapid development of private healthcare facilities. Since 2013, public authorities have been launching a series of reforms and packages aimed at enabling private capital inflows ＩＮＴＯ the healthcare industry.

Private hospitals have already witnessed a rapid expansion, with the number of private institutions almost doubling over 2011-2016. Also, many hospitals were privatised in 2016, while the number of hospitals within the public sector declined slightly, while the number of private hospitals surged by 8% in 2016 alone.

Private equity players can expect steady growth in demand for healthcare services.China’s hospitals sector is expected to be a particularly attractive focus for private investment in the coming years. Private equity firms and hedge funds are already betting on the positive healthcare industry’s performance. For instance, according to the A.T. Kearney’s Foreign Direct Investment Confidence Index, China is the third most attractive country for foreign investors. Similarly, Ally Bridge LB Healthcare Fund (a hedge fund mainly investing in Asia Pacific’s healthcare companies) has also expressed the belief that China’s private hospitals are set to become one of the best investment options.